Democrats calling for tax reform

Tuesday, Feb. 2, 1999 | noon

CARSON CITY -- Taking a cue from Republican Gov. Kenny Guinn, Assembly Democrats pledged Monday to take the first steps in a long-term effort to reform Nevada's tax structure, called one of the least stable in the nation.

Assembly Speaker Joe Dini, D-Yerington, told the opening legislative session that the House would "examine how to raise money to address structural problems" in Nevada.

And other top Democrats promised to start the ball rolling this year.

Guinn in his State of the State message said he would begin a two-year study to ensure there's a stable tax base to finance government services. This year because taxes fell short of expectations, Guinn is slicing budgets and calling for worker layoffs.

Assemblyman David Goldwater, D-Las Vegas, who headed the Taxation Committee, said he will lead an "active and open debate" on the tax structure. The discussion, he said, should begin with the 1981 "tax shift," in which the state decided to rely more heavily on sales and use taxes than on the property tax.

"We should take a look at all sources of revenue, throw it on the table and decide what's best for everyone," Goldwater said. "I've noticed the counties don't seem to be suffering from the same kinds of fiscal crisis the state is suffering.

"Apparently they have mostly stable revenues," he said. "All of the state's stable revenue sources are directed toward the counties. That's apparently the result of the tax shift."

Asked if there would be increased taxes, Goldwater replied, "Not from a Democratic Assembly."

About 70 percent of Nevada's tax revenue comes from gaming and the sales and use taxes, which are subject to wide swings.

Assemblywoman Jan Evans, D-Sparks, is drafting a bill to create a financial planning and analysis unit composed of experts from government, the universities and private business to examine the tax structure and develop long-range plans. This is "not a quick fix," she said.

She points to a study last year by the National Education Association that said Nevada has one of the worst tax structures because its volatile revenues are insufficient to maintain existing levels of services.

The study shows Nevada ranked last in the nation in its ability to meet its future needs and will face an 18.3 percent shortfall in revenue in the next eight years. Too much dependence is placed on cyclical taxes whose revenues rise and fall with the uncertain economy, the study said.

Evans noted the accounting firm of Price Waterhouse did a study on Nevada's tax structure 10 years ago and predicted the problem.

The task of changing the tax structure will prove daunting.

A recent poll by UNLV and University of Nevada, Reno found 72 percent of those questioned thought state taxes are "just about right."

While the property tax is a more stable source of revenue, 69 percent opposed any increase to support a government program they favored. If more money is needed, 69 percent favored raising the gaming tax and 62 percent supported starting a tax on corporate profits.